E-Z-GO 2000 Annual Report Download - page 5

E-business offers tremendous enterprise-wide opportunity for Textron. During the year, we
engaged in a range of Internet-related alliances aimed at fostering organic growth and reducing
costs. For example, we began to implement universal B2B procurement processes for the
purchase of goods and services worldwide. We created AssetControl Corporation, the industry’s
most comprehensive B2B marketplace specializing in the online resale of surplus industrial
equipment, excess inventory and commercial real estate. We also recruited a new senior
executive to oversee all aspects of our enterprise-wide supply chain management program.
Using ROIC as Our Key Performance Metric
We believe that ROIC is the best indicator of how well a company deploys shareholder resources.
As such, we have adopted ROIC as our primary financial measure of growth and value for our
shareholders. It now guides every investment choice. To reflect the importance now placed on
ROIC, we have more directly linked executive compensation to our ability to improve this target.
Our goal is to achieve ROIC of at least 400 basis points greater than our weighted average
cost of capital. During 2000, we increased ROIC to 13.1 percent from 12.6 percent in 1999 –
a respectable improvement but still 190 basis points from our goal. Other key financial objectives
through 2005 include:
Organic revenue growth of approximately five percent annually;
Segment profit margins in excess of 13 percent; and
Earnings per share growth averaging 10 percent per year.
A World-Class Management Team Leading Textron’s Transformation
In 2000, we fortified our management team with the appointments of Ted French, our new
Chief Financial Officer and Terry O’Donnell, our new General Counsel. Complementing our
external recruitment efforts, we also filled several key positions by tapping our own internal
talent pool.
Looking forward, our new strategic framework will require widespread transformation at
Textron. Accordingly, we have formed a Transformation Leadership Team consisting of Textron’s
top 14 leaders and a number of other key executives. This team is charged with leading the
transformation process and translating our new strategic framework into compelling,
sustainable performance.
A Case for Compelling Growth
Building on our fundamental strengths, Textron’s future has an expanding horizon. We are an
experienced industry leader with an increasingly powerful portfolio of businesses. We have a
clear strategic framework that will deliver better value for Textron and our shareowners, and
we have the right leadership team in place to execute it. Further, our strong balance sheet
provides the flexibility to make opportunistic investment decisions. All of this supports our
well-deserved reputation for excellence, illustrated by our rankings among Industry Week’s
“World’s 100 Best Managed Companies,” and Fortune Magazine’s “Global Most Admired
Companies” in 2000.
We believe that our new strategic framework is built on a solid foundation established
through a decade of excellent performance. Moreover, our strong performance this past year
has prepared Textron to face economic uncertainties and implement the necessary changes
to become an even stronger company in the future. These accomplishments, combined with
our managerial commitment to succeed, will unlock the power of the Textron enterprise. As
we turn the key and open the door to a new Textron in 2001, I would like to extend my warm
thanks to our shareowners, employees and customers for your continued loyalty and support.
Sincerely,
Lewis B. Campbell
Chairman and Chief Executive Officer
3TEXTRON 2000 ANNUAL REPORT